Should you buy off the plan?
When it comes to buying real estate in Surfers Paradise, you have a plethora of options. One of these being, should you buy off the plan? This essentially means purchasing a property before it has been built.
Many purchase off the plan as an investment, but there are also real advantages for owner occupier homebuyers. In fact, Housing Industry Association Queensland Executive Director Warwick Temby found that the state has experienced four years of solid growth in new home building.
"Overall levels of residential building activity in Queensland will still be strong for the next year or two as there will be a high level of work that will be completing," he said.
However, despite the many benefits, there are a number of risks to buying a home prior to construction. For instance, how did you feel when your favourite book became a rather disappointing movie? Here's a breakdown of the good and the bad of buying a Surfers Paradise property off the plan.
Who doesn't like saving money? In an attempt to encourage interest from a fast sales rate, developers will often put their first products on the market at a lower price. Once construction has commenced and all financial obligations have been met, the prices usually rise. Therefore, it provides a good incentive for investors who commit early!
You will be required to pay a deposit (usually 10 per cent) to secure an off the plan property, however, you won't be required to pay the full amount until the piece of Main Beach real estate is complete, which could be anywhere between one – two years.. This will give you acres of time to manage your financial standing and/or sell any existing properties you own without the need for bridging finance.
Today's price may be significantly different 24 months down the line. This means that your piece of real estate in Surfers Paradise may grow in value while it's being built, giving you more than you paid for!
In Queensland, provided the construction is done by a licensed contractor, you're protected from non-fulfillment, defective work and subsidence for up to six years from the date of completion.
Depending on the conditions within the contract, you might have some say in the floor-plan of your dwelling and be able to customise the finishings among other things to make it more suited to your needs.
There is a slight risk that the property market may fall while your slice of Main Beach real estate is being constructed, which can result in you paying more than the home's actual value.
Often builders won't allow you to view the property until it's complete, which heightens the risk of the property not being what you envisioned or the quality of work being below your standards.
A common fear among investors is that the developer could become bankrupt during construction, halting the project and putting your money in jeopardy. A solicitor or conveyancer will be able to go over all the paperwork to ensure you're protected in this instance.
Do your due diligence
Before you commit to anything, make sure you:
- Visit the property site and location
- Pore over the plans, models and display home (if there is one)
- Research the local market and surrounding areas
- Study the developer's history to ensure they are safe and trustworthy
If you would like to know more about purchasing a Surfers Paradise property off the plan, you should talk to the team at Ray White. We can help you gain access to a number of properties that are to be sold off the plan, offering unique advice to ensure your investment is a successful one.